- Auctions accelerate the property sale process. Home sellers who can't or don't want to wait ages to sell their homes often choose an auction sale over the more traditional (and usually slower) method of selling property.
- The advantage of being able to sell fast, at the true market price for the property, is that the sellers avoid expensive holding costs. The interest payable on an existing mortgage bond, the insurance costs, the municipal rates and taxes, the cost of maintaining the property and a whole lot of other costs can quickly add up to a small fortune. By choosing to auction the property, owners can limit these costs to the minimum.
- Property owners can also get their hands on the capital locked in their properties a bit quicker, using an auction sale. The property can be sold and well on its way to being transferred into the buyer's name within a few weeks of giving instructions to auction a property. The house therefore quickly turns into a chunk of cash.
- An auction sale sends a very strong message to the market that the seller is serious about selling. Buyers who don't want to waste their time with people who are simply testing the market are therefore eager to purchase properties at auction.
- An auction is also one of the only methods of sale that creates intense competition between purchasers. All the potential buyers for a property gather for the auction.
- The auction capitalises on market demand, in an environment where the highest bidder wins, to generate the best possible purchase price for a property. The auction day generates an atmosphere of immediacy and urgency. Purchasers make their best possible bids for the property, because they are acutely aware that holding back can mean losing their dream home.
- An auction gets purchasers to make a final decision. Buyers realise that there is no time to “dilly-dally” with negotiating or playing time games. The auction is the final point for a buyer to make a decision.
- Auction marketing is usually exceptional in its intensity and visibility. Auction advertising gets the property in the public eye and in buyers' minds.
- Auctioneers often congregate a whole lot of assets at one venue for auction and create a documented sales environment. This makes it easy for buyers to bid on a variety of properties. It also makes things a whole lot easier for sellers with a large numbers of assets to sell.
- At an auction, there is no question about which party the auction agency represents. In a "normal" treaty sale, a real estate agent, who is supposed to represent the sellers, may become too caught up in the buyer's situation and end up representing the purchasers instead of the sellers during negotiations.
- An auction is fair, open and transparent. There is no backhand wheeling and dealing going on. The sellers cannot be accused of having a hidden agenda. Everything is out on the table and handled in the open.
- An auction, by nature, is not a negotiation. The sellers set the terms for the sale. Bidders just have to fall in with the seller's demands. The seller's rules and conditions are not subject to negotiation. If the terms do not suit a purchaser, he/she may let that disagreement be reflected in his/her auction bid.
- Auction sales are the real deal. They are not suspensive or conditional. An auction leads to a final sale - not a potential or possible sale. When the hammer falls, the auction is finalized and complete.
Does all of these reasons give you a better idea why people auction their properties?
